Zerohedge

Television magnate David Smith’s purchase of The Baltimore Sun last year has reshaped the paper’s editorial direction, focusing on crime coverage in Brandon Scott’s crime-ridden Baltimore City and critiquing Maryland’s radical Democratic leadership in Annapolis. Under Smith’s ownership, the newspaper has intensified its scrutiny of radical progressive policies, contributing to twin economic and energy crises. Further exacerbating Maryland’s challenges, the Department of Government Efficiency’s downsizing of the federal bureaucracy is expected to spark significant economic headwinds for a state (such as credit downgrade) that relies heavily on federal workers and lacks any real sizeable private-sector economy. 

The absurdity in the sanctuary state that prioritizes illegal aliens and transgenders was realized in recent days when radical leftist lawmakers in Annapolis prioritized a bill to install condom machines in elementary schools. These unaccountable politicians purposely overlooked solving the energy crisis that is bankrupting Marylanders at a shocking rate. According to local outlet WMAR, out of 1.3 million power customers in Central Maryland, more than 264,000 are behind on their bills. 

Maryland Democrats are pushing a bill to put VENDING MACHINE CONDOMS in KINDERGARTEN

Literally beyond parody pic.twitter.com/Ynd5X15vzP

— Libs of TikTok (@libsoftiktok) February 26, 2025

In addition, far-left Gov. Wes Moore is well over his head as he struggles with a budget crisis and death spiral that threatens to push the state into a “deep recession.”

Maryland’s Death Spiral: Reckless Democratic Lawmakers Spark Budget Crisis Fears As “Deep Recession” Looms https://t.co/reReKpxTsN

— zerohedge (@zerohedge) November 28, 2024

Returning to Smith’s transformation of The Baltimore Sun, which now delivers quality commentary on local politics that Marylanders actually want to read instead of years of toxic wokeism, a guest op-ed by House Minority Leader Jason Buckel (R) and House Minority Whip Jesse Pippy (R) titled “Democrats Don’t Have Answers for Maryland’s Energy Crisis” highlights Maryland Democrats are “clearly in denial” that their policies have backfired and risks the Illinois 2.0 moment.

How times have changed for the local paper – now offering readers critical op-eds on Democrats: 

Many Democrats in Annapolis — from the governor to the House and Senate leadership — are clearly in denial. First, we saw it with the budget deficit — some Democrats attempt to blame former Gov. Larry Hogan, and others insist that the $10 billion Blueprint for Maryland’s Future plan has not contributed to the shortfall. Now, as Maryland’s ratepayers are getting crushed under the weight of high electricity costs, Maryland Democrats are, in the governor’s case, ignoring the problem or, in the case of the General Assembly, feigning shock, blaming others and offering false “fixes.”

For many years, Maryland ratepayers have been the metaphorical frog in the pot of water. Through their reckless environmental policies that sacrifice our ratepayers on the altar of clean energy, the Democrat-controlled General Assembly has been gradually increasing the pressure on energy prices. Now, those rates have spiked at a time of increased usage, and our ratepayers are finding themselves in boiling-hot water.

In response to the outcry from families crushed by high energy bills, those who have advocated for the foolish policies responsible for these rate hikes have offered a series of measures they claim will provide affordable, reliable energy to lower utility bills. That sounds great, but the reality is these measures do not achieve any of those goals — they merely double down on Maryland’s green energy obsession that got us here in the first place.

The Next Generation Energy Act (H.B. 1035) declares the state’s support for nuclear energy while offering no incentives for nuclear investment and discouraging new nuclear projects with expensive labor construction requirements and unnecessary DEI policies that do nothing to reduce energy costs. It also includes provisions for natural gas plants, but only those with a long-term plan to convert to hydrogen or biofuel, making the projects less feasible and more costly. These policies won’t provide immediate or long-term relief to ratepayers.

Another of the Democratic leadership’s bills, the Renewable Energy Certainty Act (H.B. 1036), furthers the push for more solar farms but restricts local governments’ ability to manage them. It also makes rooftop solar systems more expensive by adding regulatory burdens on both systems and installers, ultimately doing nothing to help ratepayers reduce their energy bills.

The Energy Resource Adequacy and Planning Act (H.B. 1037) expands state government to create the Integrated Resource Planning Office within the Public Service Commission (PSC) tasked with developing a 25-year comprehensive energy forecast. The bill also requires the PSC to adopt regulations requiring power companies to develop an integrated resource plan. While increased planning may be a good idea, the priority of this measure is clean energy, while affordable rates are again an afterthought. This is yet another piece of legislation that places the needs of Maryland’s families and businesses after the needs of Maryland’s Democratic leaders to please the ever-present green movement in Annapolis.

Over the last six years, Maryland has lost 6,000 megawatts of energy generation through the closure of fossil fuel power plants, not including the pending closures of Brandon Shores and H.A. Wagner power plants. Over that time Maryland has only gained 1,600 megawatts of new energy generation. Maryland imports over 40% of our energy needs from out-of-state locations. This energy deficit has been exacerbated by a demand surge brought on by the electrification policies pushed by the Democratic leadership, who simply ignore the benefit of natural gas and other proven energy sources. Nothing in the leadership’s plan makes any of this better. The hard reality is that providing immediate rate relief to Marylanders in the short term is a daunting task. This problem was created over many years with the passage of numerous pieces of reckless legislation. Significant damage has been done to our energy market and it will take time and willingness to reverse these policies and even longer to bring new energy generation online.

The best way to end Maryland’s energy crisis is to end our obsession with green energy and its impossible and expensive goals. The members of the House Republican Caucus are offering numerous initiatives to end Maryland’s expensive green energy addiction. This includes legislation exempting public safety buildings from green energy requirements, prohibiting state and local governments from increasing energy costs through frivolous global warming lawsuits, limiting the provisions of the Climate Solutions Now Act to the extent economically practicable, and eliminating costly “green energy” subsidies that show up on your utility bill. We all want clean energy — but people have to be able to afford it. Until that day comes, all options have to be on the table.

Local lawmakers Buckel and Pippy, who penned the op-ed, should’ve added a section about the DOGE-related disaster coming down the pipe that will likely create even larger headaches for the state locked in a dangerous death spiral.

As we’ve previously noted, our recent conversation with a large asset management firm in the region revealed the state’s dire fiscal situation and how their clients are being told not to add Maryland munis to their bond portfolio. Some clients are being advised to find residency in conservative states amid fears Democrats will enact out-of-control tax hikes as the state implodes. 

What a shitstorm. This is what happens when leftist activists run the state – not actual managers – everything turns to shit. 

Authored by Ryan McMaken via The Mises Institute,

In recent days, President Donald Trump, Elon Musk, Senator Rand Paul, and some others have pressed for an audit of the US gold reserves, with a special focus on the gold at Fort Knox. This is perfectly reasonable given that the US gold reserves – which are the property of the US Treasury and not the Federal Reserve – have not undergone even a partial audit in at least forty years.

Part of the reason for the audit is to discover if any of the gold has been stolen. The US Mint, the government agency that acts as custodian of the gold, has reported for many years that the official size of the gold reserve is 8,133.46 metric tons of gold. Since there has been no audit in so many decades, though, the Mint’s position is essentially “trust us, bro.” Trusting federal bureaucrats has never been a particularly wise policy, and this is why there are ongoing demands for some sort of transparent audit.

If the total size of the US’s gold holdings is revealed to be a number below the official number, then it will just be the latest reminder that there a great many thieves and incompetents among the people running the US federal government. After all, if there is less gold than reported in the US gold reserves, it was presumably stolen at some point.

This would be a fitting destiny for the US government’s gold since much of that was stolen to begin with. When I say “stolen,” I don’t even mean in the sense that “taxation is theft” and that the US bought the gold using tax dollars. In truth, the way the US Treasury acquired much of its gold hoard is even more underhanded than ordinary taxation.

Rather, it is likely that most of the gold at Fort Knox, as with the US regime’s gold in general, is gold stolen from ordinary Americans as a part of Franklin Roosevelt’s efforts to end the gold standard and confiscate private gold holdings in the United States. That is, the US gold reserves are a legacy of the way the US government reneged on its promises to redeem US dollars in gold. Rather than pay out the gold that was owed to holders of US dollars, the US government hoarded it instead. That stolen gold is what the auditors will be counting if the US government ever allows an honest accounting of the Treasury’s gold reserves.

Where Did the Gold at Fort Knox Come From?

In his 1994 article for The Journal of Economic Education, economist William C. Wood writes that “the Fort Knox depository is now an artifact of gold standard days.“ He then adds, “The gold currently in Fort Knox came from the melting of Depression-era gold coins, from lend-lease arrangements in War II, and from government operations under the gold standard.”

That reference to “Depression-era gold coins” is telling. Most of those gold coins were likely the coins confiscated from private owners by the US government following Roosevelt’s Executive Order 6102 which outlawed the private ownership of gold. Few Americans owned gold bars, of course, and the gold that was in non-institutional private hands was mostly gold coin. Roosevelt’s edict required that private citizens hand this gold over to the US government in exchange for what was effectively below-market prices. And what if you would rather not give up your property to the US government? Too bad.

Moreover, private banks and the central bank held gold in the form of coins for dollar holders who, prior to confiscation, would occasionally present US dollars for redemption in gold. This is, in part, the gold in Fort Knox that that Wood classifies as gold held for “government operations under the gold standard.” After 1933, however, banks did not need to hold onto any gold coins for this purpose since Roosevelt’s effort to end the gold standard included a prohibition on banks paying out gold.

So, these coins ceased to have an immediate market value among banks. Where did all these gold coins end up? Most ended up with the US Treasury after the Treasury seized the Federal Reserve’s gold in 1934.

Evidence of this can be found in the nature of the gold that is now held at Fort Knox. Wood further explains that the gold there is not the type of gold usually found in gold bars used for international transactions: “The gold resulting from melting of coinage has considerably lower quality than the ‘fine’ or ‘good delivery’ gold commonly used in international trade. The majority of the gold in Fort Knox is the lower-quality coin gold.”

The legacy of the US regime’s gold theft is not limited to the coins that happened to be in private hands in 1933, however. Much of the gold that is in the US gold reserves today is gold that would have been paid out to the private sector had the US government not reneged in its promises to pay war bonds in gold. 

The 1934 Default on Gold-Based Liberty Bonds

Every time there is a debate over the so-called “debt ceiling,” various servants of the US regime like Jerome Powell or Janet Yellen claim that “the United States has never defaulted.” This is a lie. 

Arguably, it was a default, in the broad sense, when Roosevelt’s regime refused to make good on its obligations to dollar holders under the gold standard. The US also defaulted in a formal and legal sense when it refused to pay its World War I Liberty Bonds in gold as promised. Specifically, in 1934, the United States defaulted on the fourth Liberty Bond. The contracts between debtor and creditor on these bonds was clear. The bonds were to be payable in gold. This presented a big problem for the US, which was facing big debts into the 1930s after the First World War. As described by John Chamberlain:

By the time Franklin Roosevelt entered office in 1933, the interest payments alone were draining the treasury of gold; and because the treasury had only $4.2 billion in gold it was obvious there would be no way to pay the principal when it became due in 1938, not to mention meet expenses and other debt obligations. These other debt obligations were substantial. Ever since the 1890s the Treasury had been gold short and had financed this deficit by making new bond issues to attract gold for paying the interest of previous issues. The result was that by 1933 the total debt was $22 billion and the amount of gold needed to pay even the interest on it was soon going to be insufficient.

So how did the US government deal with this? Chamberlain notes “Roosevelt decided to default on the whole of the domestically-held debt by refusing to redeem in gold to Americans.”

In other words, thanks to its profligate deficit spending, the US government was running out of gold by the early 1930s. So, the regime defaulted on the gold bonds. The gold that would have passed into private hands was hoarded by the federal government and declared off limits to the public. Much of that gold remains in the US gold reserves today.

Defaulting on International Gold Obligations

Not all of the US Treasury’s gold is stolen from ordinary Americans. Some is stolen from foreign governments. Another illustration of the dishonesty of the “we never defaulted” narrative is the fact that the US government defaulted in 1971 on its obligations to foreign government under the Bretton Woods system. That is, rather than pay what was owed to foreign governments, the US government once again decided to steal this gold and simply said “tough luck” to everyone with a legal claim to the gold. Or, as Treasury Secretary John Connally said at the time, the dollar “is our currency, but it’s your problem.”

US Gold Reserves: A Legacy of Theft and Lies

The gold reserve was never supposed to be a static, untouchable hoard of the US federal government, as it is now. It was supposed to be there for Americans and other users of dollars who traded in their dollars for gold. Gold was supposed to flow in and out. Then, the US government slammed the doors of the federal gold vaults shut and declared “the gold is all ours forever.” 

Like most everything else the US government “owns,” the gold in the US gold reserves is there due to many years of lies, gaslighting, and deception. The gold is there because the US regime defaulted on its debts and reneged on its promises to back dollars in gold.

If a true auditing team is ever allowed to actually examine the US regime’s gold, it will be examining the evidence of crimes from long ago. The auditors will be counting the gold stolen from our ancestors to enrich the state and its friends.

The Trump administration’s epic purge of federal workers is shaping into one of the most significant job cuts in a generation. Early indicators suggest Northern Virginia, Washington, DC, and Maryland may be in the beginning innings of an economic downturn, as jobless claims rise and a surge in active housing listings signals a very ominous outlook.

On Thursday morning, Torsten Slok, chief economist at Apollo, joined Bloomberg TV, warning, “The consensus expects total DOGE-related job cuts to be 300,000 … However, studies show that for every federal employee, there are two contractors.” 

“As a result, layoffs could potentially be closer to 1 million,” Slok noted. 

Watch Slok’s interview…

Torsten Slok, chief economist at Apollo, examines the potential level of federal job cuts that may be seen from the Department of Government Efficiency and says stagflation is “the backdrop for the conversation that we’re having in markets at the moment” https://t.co/w75JWgHA0u pic.twitter.com/RgKzIM4Ow7

— Bloomberg TV (@BloombergTV) February 27, 2025

New jobs market data this AM showed that DOGE-related layoffs are beginning to filter through. Now comes the tsunami…

DOGE Wins As DC Jobless Claims Soared Last Week https://t.co/ISgKiUOW67

— zerohedge (@zerohedge) February 27, 2025

Dominic Konstam, head of macro strategy at Mizuho, asked: “DoGE-led recession risk?” 

The market is focused on a negative economic fallout from Federal spending cuts. The level of potential Federal job losses is too small to derail growth, but overall government spending has been egregiously high in recent years. There has also been excessive job growth in the “government” sectors, including federal, state, and local government, as well as in education and health. If DoGE sets a precedent on jobs and achieves spending cuts that ricochet through the quasi-public sector, it is likely that new economic headwinds will develop. ​​

Oh wow, where have we seen this? Just 3 weeks ahead of the curve.

And now the official narrative is set. https://t.co/IVA9GG8qxG pic.twitter.com/FJU0G92Q3H

— zerohedge (@zerohedge) February 27, 2025

Earlier this month, BofA’s Michael Hartnett commented: “Washington, DC recession begins.”

“Government Recession Begins”: DC Active Home Listings Soar, Jobless Claims Spike As DOGE Drains Swamp https://t.co/1vP15sKxff

— zerohedge (@zerohedge) February 16, 2025

New data from Bright MLS, one of the most extensive multiple listing services in the US, shows that DC’s active listing continues trending around 25% compared to the same week one year ago and is up 4% from one week ago. 

DC active listings are trending well over levels seen in the past three years and could be ripe for much more upside as DOGE-related layoffs ramp up. 

Active listings in DC with price decreases are also on the rise. 

As the spring selling season begins, median prices in DC are still trending above the last few years. 

Callie Cox, chief market strategist at Ritholtz Wealth Management, called the situation unfolding in Virginia, Washington, DC, and Maryland as the “largest job cut in American history (by a mile).”  

Google searches for “recession” remain tame across the country, but DC is currently searching for it the most… pic.twitter.com/QImaoN5EKk

— Bespoke (@bespokeinvest) February 27, 2025

And it begins. 

Authored by Ken Silva via Headline USA,

Police in Loveland, Colorado have arrested a suspect who allegedly vandalized a local Tesla dealership several times, and who left incendiary devices at the scene.

Justin Thomas Nelson, 42, a transgender person who goes by the first name Lucy, was arrested Monday night without incident.

The arrest stems from a Lovement Police investigation into attempted arson that took place at a Tesla shop shortly after midnight on Feb. 7. In addition, police said that various vehicles and the Tesla building were vandalized with graffiti messages, some of which were offensive and hateful in nature.

A radical trantifa activist has been arrested in Loveland, Colo. for allegedly carrying out a series of violent attacks on @Tesla property using incendiary devices.

Lucy Grace Nelson, a man, has been incorrectly booked into the jail as a “female” by @LarimerSheriff. I can… pic.twitter.com/TLDpCVcMlN

— Andy Ngo (@MrAndyNgo) February 27, 2025

Police had already received similar reports on Jan. 29 and Feb. 2, but those incidents were less serious than the Feb. 7 attempted arson, they said.

“On Monday evening, Nelson again returned to Loveland Tesla while in possession of additional incendiary devices, along with materials attributed to vandalism,” Loveland Police said in a press release.

“Detectives apprehended Nelson prior to further damage occurring.”

Nelson was booked into the Larimer County Jail on the following charges: Explosives or Incendiary Devices Use During Felony, a Class 2 felony; Criminal Mischief $2,000

A judge issued a $100,000 cash surety bond for the alleged trans terrorist.

Police said they worked with the ATF on the case.

Mainstream media, including Fox News, was widely panned for reporting the suspect’s gender as female.

Dear everyone,

Lucy Grace Nelson aka Justin Thomas Nelson, is NOT a woman.

That’s a man @FoxNews

I thought we were done lying about transgenders and feeding into their delusions?

“Lucy” vandalized a Tesla dealership several times and brought incendiary devises. https://t.co/yT96kou0L9 pic.twitter.com/GWCwnjonj9

— Kristi L. Talmadge (@KristiTalmadge) February 27, 2025

Authored by Brandon Smith via Alt-Market.us,

In the lead up to the 2024 presidential elections in the US the Biden Administration in collusion with UK, European and Ukrainian partners devised a plan to “Trump Proof” the war in Ukraine. In other words, they openly admitted that they wanted to prevent Trump from taking any actions that might force an end to the war and render a serious peace agreement.

Part of that plan included the expanded use of long range guided missiles supplied by western governments. These missiles require flight data from NATO assets along with NATO personnel to launch – Meaning, any strikes involving these weapons require the direct involvement of NATO troops. Biden’s greenlight for long range strikes into Russia using US-made and controlled missiles was an obvious attempt to trigger an escalation.

Over the course of the war I have written extensively on my concerns that the ultimate aim of the conflict is to trigger wider international conflagration. There have been globalist interests involved in Ukraine (the Atlantic Council specifically) for at least a decade stirring the pot and provoking Russia into an invasion of the Donbas region. I wrote about the influence of the Atlantic Council in Ukraine and in the Middle East in my article ‘The Atlantic Council Has Big Plans For A War Between The US And Iran’.

The globalists wanted to create a catastrophe, blamed on the preponderance of nation states, that they could use to erase all borders and completely reshape the world. So far they have not achieved this goal, but it’s not from a lack of trying.

The Ukrainian attack on Kursk in Russia along with the approval of long range missile attacks were overtly publicized in the western media as “proof” that Vladimir Putin’s “red lines” were meaningless and that Russia would never use nukes in response to NATO operations. They know that one of the primary concerns among western populations is the outbreak of global nuclear exchange. The elites think if they can remove that fear then everyone will happily support NATO boots on the ground.

They are mistaken.

Neither Americans nor Europeans have any interest in fighting and dying over an insignificant patch of land like Ukraine. Ukraine President Vladimir Zelensky has consistently called for NATO to supply troops to the front lines. In fact, Zelensky acts as if someone promised him eventual troop intervention (Boris Johnson?).

Russia’s attrition tactics have been highly effective in wearing down the Ukrainian front lines. It’s important to understand that attrition tactics do involve capturing key strategic ground, but the greater goal is to destroy enemy troops. Though Russian gains might not seem significant to a normie with no study in military strategy, the truth is that Ukraine is now desperate for manpower and they have no means to replace lost troops. The war is over, they just haven’t admitted it yet.

Zelensky’s delusions about Ukraine’s ability to win the war and gain back the massive territory they have lost must be driven by something; I can only assume that he still believes that NATO intervention is imminent. The EU and UK have played a big role in giving Zelensky false hope and preventing practical peace negotiations. Ukraine is NEVER going to get the Donbas region back; they need to accept this and move on.

On the western establishment side of the equation, government officials and the media have been bombarding the public with tales of an impending Russian blitzkrieg into Europe should Ukraine be allowed to fail. Of course, they also claim that Russia is losing millions of soldiers in “meat waves” and that their military is crippled.

The propaganda machine can’t have it both ways – Either Russia is impotent and their military hobbled, or, they are an unstoppable behemoth that will conquer all of Europe if little Ukraine should implode. Every element of the war propaganda has been carefully crafted to convince the populace to back a direct military incursion into the region.

With the return of Donald Trump, everything has changed in Ukraine. Trump has been notably unimpressed with Zelesnky and is keen to end the bloodshed quickly. So much so that he may negotiate the peace terms without Zelensky’s involvement. Trump has demanded that Zelensky hold legitimate elections in Ukraine before the US continues its support, and even referred to Zelensky as a dictator.

Without the US there is no NATO and if the US cuts off arms shipments then Ukraine is done fighting. Unless, Europe leaps headfirst into the war…

As I noted last August:

“The timing of the Kursk offensive and the call for missile strikes on Russia is not a coincidence. Trump claims that his intention is to end the Ukraine war as quickly as possible once he enters office.”

“They need to escalate the war into something bigger, something that can’t be undone. Right now, the war can be ended – All it takes is some diplomacy and forcing Ukraine to understand that they’re not going to get the Donbas or Crimea back no matter how many lives they sacrifice.”

The path to peace is looking more and more attainable and my belief that a larger war is inevitable could be wrong (I certainly hope so). However, the globalists are still trying to create a Hail Mary scenario; they are not giving up. If they can’t get Americans into the war directly, then they might put Europeans on the front lines on the gamble that this will force the hand of the US.

This month Zelensky called for the creation of an ‘armed forces of Europe’ in response to Trump’s push for an expedient peace deal. He also called for Ukraine to be armed with nuclear weapons.

European and UK elites have applauded the concept of an EU military and in way it’s ironic because this stands as an admission that Europe and most of the west have been lazily using the US as a shield for decades. They have no idea how to defend themselves anymore.

The claimed role of this European army would be to “maintain peace” in Ukraine. The problem is, Putin has stated repeatedly that any presence of western troops will be treated as an act of aggression. Keir Starmer, Prime Minister of Britain and a rabid authoritarian, has already offered at least 30,000 troops to the cause. French, Canadian and German officials have also expressed interest in a European army and deployment to Ukraine, though they admit they don’t even want to spend a minimum 2% of their GDP on NATO.

To be clear, the hysteria peddlers are correct in saying that Russia could roll right over top of Europe’s defenses if they wanted to (this is assuming no one launches nukes). The EU and UK have already done most of the work – Destroying their own nations with open borders and mass immigration for the past ten years. Third world migrants have no loyalty to the west and Gen Z is completely disenchanted with the idea of further war. European leaders will definitely try to impose forced conscription.

This doesn’t mean Putin intends on going to war with Europe, only that he could easily take them down with attrition if he wanted to. Putin’s odd past associations with elements of the Davos crowd should be taken into consideration. There’s always the chance that Russia is simply controlled opposition and that the war is predetermined. That said, so far Putin has not behaved like a man on a mad dash into nuclear oblivion. He has been very careful to keep the war contained to Ukraine.

Starmer and his globalist ilk are well aware that the presence of British or EU troops would sabotage any peace negotiations set in motion by the Trump Administration. That’s the point. I believe that the globalists think they can force the hand of America, creating a catastrophe so egregious that the US will have to get involved.

When UK officials talk about getting a “security guarantee” from Donald Trump, this is what they mean – By landing troops in Ukraine for “peacekeeping”, they are trying to obligate the US to a response when Russia retaliates.

Americans are not going to war for the globalists. I would argue that we are far more interested in marching to eliminate the globalists than we are in fighting the Russian people. Why not get rid of the problem at the root?

However, the globalists don’t necessarily need the US to expand the Ukrainian war. For now, Trump only has limited economic influence over the UK and EU and that’s not enough to prevent troop mobilization or escalation. This may be the last play of the elites to set WWIII in motion.

*  *  *

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Apparently one of the ‘six ways from Sunday’ the intelligence community has to get back at the Trump administration is threatening to leak sensitive information to ‘a foreign intelligence service’ if they’re fired as part of DOGE’s efforts to downsize government.

In a Feb. 24 CNN article titled “How Trump’s government-cutting moves risk exposing the CIA’s secrets,” the outlet warns “As the CIA weighs staff cuts, current and former intelligence officials say that mass firings could offer a rich recruitment opportunity for foreign intelligence services – like China or Russia – who may seek to exploit financially vulnerable or resentful former employees.“

“on the CIA’s 7th floor – home to top leadership – some officers are also quietly discussing how mass firings and the buyouts already offered to staff risk creating a group of disgruntled former employees who might be motivated to take what they know to a foreign intelligence service,” the article continues.

This is so crazy!

pic.twitter.com/p8B3dXrkAW

— Elon Musk (@elonmusk) February 27, 2025

The Federalist goes even deeper:

Is that a threat from the CIA? Is CNN reporting that Trump should keep everyone employed because, if he doesn’t, former CIA agents will spill U.S. secrets to our enemies? Apparently so.

But if that’s the case, these are exactly the employees who should be fired. Those with too little integrity to exit with grace should not be employed in jobs with access to sensitive information. The CIA employees CNN describes should not be trusted with any more secrets.

Within the same piece, CNN ridiculously makes it sound as if valued, model intelligence employees will get the axe — and that those same employees have loose lips and are ripe for the picking. Which is it, CNN?

The media want you to be worried because they are worried. If Trump cleans house, it will destroy their business model. CNN and other propagandists have exploited unethical leaking of deep state sources, treating their whispers as gospel, and amplifying their aims through high-profile “news” stories.    

If Trump fires their sources, it will be harder for the media to collude with the intelligence community to craft propaganda to sell to the public. The connection between CNN and the deep state has been too cozy for too long.

Read the rest from The Federalist here…

People have to be charged.

If someone threatens to sell state secrets to China because they’re being fired, they should be charged with treason.

What’s the punishment for treason again?

— Gunther Eagleman™ (@GuntherEagleman) February 27, 2025

And how exactly did CNN get access to state secrets in the first place? 🧐

Gee, you think the Deep State is colluding with the fake news media, or what?

— Mindy MF Robinson 🇺🇸 (@iheartmindy) February 27, 2025

I mean that’s treason

— Jacktron (@jacktronprime) February 27, 2025

Submitted by Dhaval Joshi via BCAResearch.com,

President Trump is hosting Prime Minister Starmer in the White House today. Yet the most pressing issue that they will likely not discuss is that both the US and the UK are staring down the barrel of what I have called a ‘mini-stagflation’ – a period of inflation stuck well above 2 percent combined with slowing growth. 

Meanwhile, in the euro area and Japan, the pre-pandemic era of ‘too low’ inflation is well and truly over as structural inflation expectations have finally lifted to 2 percent.

This setup of above-par inflation expectations in the US and UK combined with at-par inflation expectations in the euro area and Japan has major implications for relative central bank policy. Worryingly though, it also sows the seeds for the next financial shock.

Inflation Shocks Stay In The Collective Memory For A Long Time

The oft-quoted disclaimer on investment products is that past performance is a poor guide to future returns. Yet when it comes to inflation expectations, past performance is an excellent guide to future returns.

Long-term inflation expectations are nothing more than a simple weighted average of long-term historic inflation and extremely recent inflation, with the long-term historic component dominating. Specifically:

10-year expected inflation = 0.85 * 10-year inflation + 0.15 * 3-month inflation

As the charts in this report illustrate, this simple expression near perfectly explains long-term inflation expectations in the US, UK, euro area, and even in Japan!

Technical note: In the UK, as pension funds are captive buyers of inflation protected bonds, this artificially depresses UK inflation protected bond yields, and thereby artificially raises market-based UK inflation expectations by 0.5 percent versus the ‘true’ expectations. The analysis in this report adjusts for this distortion.

This basic maths for inflation expectations has a crucial takeaway. An inflation shock – such as happened post-pandemic – which lifts the long-term historic inflation rate will leave long-term inflation expectations structurally elevated.

Or, put in simple English:

Inflation (and deflation) shocks stay in the collective memory for a long time.

This leads to another crucial takeaway. For the euro area and Japan, which were experiencing chronically ‘too low’ inflation (if that isn’t an oxymoron!), the post-pandemic inflation shock has been ‘benign’ – by finally lifting structural inflation expectations to the required level of 2 percent.

However, for the US and the UK, which were experiencing broadly ‘at target’ inflation expectations, the post-pandemic inflation shock has been ‘malign’ – by elevating those structural inflation expectations to well above 2 percent.  

In the case of the US and the UK, the post-pandemic inflationary shock must be neutralised by a subsequent deflationary shock to restore structural inflation expectations back to 2 percent. But as the Fed and the BoE are unlikely to engineer such a deflationary shock, it must ultimately come from another source. More about that in a moment.

Until a deflationary shock arrives though:

The US and UK will be stuck with elevated structural inflation expectations.

Tariffs will only make matters worse. Past performance is an excellent guide to inflation expectations, provided the economy has not experienced a paradigm-shift that makes history a poor guide to the future.

In the UK, Brexit was such a paradigm-shift. Hence, after the 2016 vote to leave the EU, UK inflation expectations briefly broke upwards from the historical experience. In the US, a less pronounced break upwards happened after Trump’s first election victory in 2016, reflecting that a Trump presidency can be regarded as a paradigm-shift. To the extent that the same is true for Trump’s second presidency, the risk is that it will lift US structural inflation expectations from an already elevated level. 

The Next Financial Shock Could Come From Japan

The setup of above-par inflation expectations in the US and UK combined with at-par inflation expectations in the euro area and Japan has major implications for relative central bank policy.

Absent a new deflationary shock, the Fed and the BoE have very limited scope to cut interest rates. The ECB, by contrast, has more scope to unwind its post-pandemic tightening.

Most significant though is the development in Japan. With inflation expectations back at 2 percent, a zero-interest rate policy is no longer fit for purpose. The BoJ must rapidly normalise interest rates to its estimate of neutral at 1-2.5 percent.[1]

Importantly, the mini-stagflation in the US will facilitate such a normalisation, because as BoJ Governor Kazuo Ueda explains, the BoJ must carefully consider “developments in overseas economies, especially the US economy, and their impact on financial and foreign exchange markets”. In plain English, this means that a Fed on hold because of a mini-stagflation opens the door for the BoJ to normalise interest rates.

Therein lies a potential source of the next financial shock. As I have consistently highlighted – for example, in More On The Yen Carry Trade… And Unsustainable Extremes | BCA Research – Japan’s deeply negative real rates have inflated the AI bubble. Therefore, the normalisation of Japanese interest rates is a prime candidate to burst it.

In fact, the yen carry trade is reflexive. It needs a funding currency with stably low or negative yields (the yen); and a destination investment with stably high returns (AI stocks). So, the bubble could burst: either if the stably low yield on the yen funding ends; or if the euphoria around AI stocks is shattered.

Observe that since early-2023 there has been a great (inverse) fit between bellwether stock Microsoft’s valuation and the Japanese 10-year real bond yield.

Looking at this chart:

The Japanese real bond yield turning positive would constitute a meaningful shock for the global stock market.

Some people have asked for a critical level for the dollar/yen exchange rate as it is easier to watch. Monitoring the yen’s appreciation is fine, provided it is understood that the overarching driver is Japan’s real bond yield rising, and the exchange rate is just the effect. That said, if dollar/yen fell below 145 it would almost certainly coincide with an air-pocket in the global stock market.

To sum up, the US (and the UK) is staring down the barrel of a mini-stagflation until a deflationary shock, potentially emanating from Japan, neutralises it. But the timing of this deflationary shock is uncertain.

The good news is that three investment conclusions hold true irrespective of how long it takes for a deflationary shock to end the US (and the UK) mini-stagflation:

• Overweight the yen.

• Underweight the euro.

• Underweight US stocks in a global portfolio.

Maine’s public schools are seeing their worst test scores in 30 years, with student performance in reading and math ranking among the lowest in the nation.

According to the latest data from the National Center for Education Statistics, only 33% of fourth graders are proficient in math, while just 26% meet reading standards. Older students fare even worse, with only 25% proficient in math and 26% in reading, placing Maine 38th nationwide.

The decline comes as schools prioritize the children of illegal migrants, a group welcomed by the state’s politicians and employers, according to Brietbart.

Maine spends approximately $15,000 per student—over $1,000 above the national average—yet its schools are struggling with an influx of non-English-speaking students.

The Democrat-led state has embraced sanctuary policies, contributing to a surge of mostly illegal migrants, according to the Federation for American Immigration Reform (FAIR). Over the past decade, the number of students with limited English proficiency has skyrocketed.

In Portland, 70% of new enrollees require special language instruction before tackling other subjects. Schools are diverting funds to hire multilingual staff, with classrooms now accommodating speakers of 57 different languages.

The Brietbart article says that education budgets are soaring nationwide as schools absorb a surge of migrant children under the Biden administration.

Like Maine, states across the country are redirecting funds to accommodate these students. In Pennsylvania, the number of English Language Learner (ELL) students jumped 40% from 71,766 in 2020 to 99,889 in 2024.

Meanwhile, academic performance is declining. Data from the California Assessment of Student Performance and Progress (CASPP) shows migrant students struggling, with only 24% meeting English standards, 15.8% proficient in math, and just 11.7% in science—figures that have remained largely stagnant.

By Michael Every of Rabobank

Love and Death

I look at the world this morning and wonder how to fit what is going on into two pages, for markets who prefer two bullet points of two words each. So, I turn to Woody Allen’s 1975 movie ‘Love and Death’, an homage to 19th century Russian literary genius, for help:

NATASHA: It’s a very complicated situation, Cousin Sonja. I’m in love with Alexei. He loves Alicia. Alicia’s having an affair with Lev. Lev loves Tatiana. Tatiana loves Simkin. Simkin loves me. I love Simkin, but in a different way than Alexei. Alexei loves Tatiana like a sister. Tatiana’s sister loves Trigorian like a brother. Trigorian’s brother is having an affair with my sister, who he likes physically, but not spiritually.

SONJA: Natasha, it’s getting a little late.

NATASHA: The firm of Mishkin and Mishkin is sleeping with the firm of Taskov and Taskov.

SONJA: Natasha, to love is to suffer. To avoid suffering, one must not love. But then one suffers from not loving. Therefore, to love is to suffer. Not to love is to suffer. To suffer is to suffer. To be happy is to love. To be happy, then, is to suffer, but suffering makes one unhappy. Therefore, to be unhappy one must love, or love to suffer, or suffer from too much happiness… I hope you’re getting this down.

NATAHSA: I never want to marry. I just want to get divorced.

President Trump suggested 25% US tariffs on Mexico and Canada could be delayed to April, then aides said they begin as scheduled March 4; then Trump said the EU, “which was set up to screw us”, will get tariffed at 25% rate in April too. Those who want to see March becoming April, then May, etc., did, and MXN and CAD swung; others still see high US tariffs loom, and when they finally hit, it will be USD that rallies.

The Fed’s Bostic said the Fed Funds rate needs to stay where it is for now, and “We need to be in a restrictive posture.” The timing seems odd when DOGE is slashing and burning, and market fears about recession are rising again – but then again, so are consumer inflation expectations. With the US 10-year yield at 4.28% at the time of writing vs. a high of 4.79% on January 14, maybe the White House can live with that Fed stance… for now.

Ukraine says the minerals deal it’s to sign with the US depends on a security guarantee – which doesn’t seem guaranteed given it hasn’t been negotiated yet. 24-hours ago, the deal allowed Ukraine “to fight on”: does it? Uncomfortably for many analysts, the bottom layer of the Maslow –and current market– pyramid is not really AI, or love of profits, but fear of death.

EU Commission President Von der Leyen is pushing a pan-European defence mechanism for key platforms and loosening fiscal rules to allow defence spending. European leaders will meet in London on March 2 and Brussels on March 6 to discuss these joint plans.

VdL is also pushing a €100bn Clean Industrial Deal to go green, not khaki. However, EU bureaucratic acronyms take time to slot into place while steel and aluminium firms needed for the military face high energy costs and global competition, and defence doesn’t think about the environment or emissions in the green sense. As Politico puts it, ‘Europe’s impossible choice: Which industries should survive the green transition?’

Poland says if Germany doesn’t want US troops based there, it will take them instead, as Berlin says it wants independence from the US and moots an extra €200bn in defence spending. Fort Trump is calling.

Far-right Romanian presidential candidate Georgescu, whose first-round victory saw the election cancelled, has been detained on suspicion of false statements regarding campaign finance, illegal possession of weapons, and initiating or establishing an organization “with a fascist, racist or xenophobic” character. Will there be more US-EU tensions over this?

The US told Chevron to pull out of Venezuela, suggesting a hardline Monroe Doctrine, as whispers are that any loss of oil output on that front can be compensated for by the Middle East.

We got a bizarre video of golden Trump statues and bearded belly dancers in “Trump Gaza” posted on the US President’s social media account. Yet the ludicrousness of the imagery perhaps sent a serious message too: why has the region constantly defaulted to the equally ludicrous status quo ante? That’s as The Wall Street Journal reports, ‘A Decimated Hamas Prepares for a New Fight With Israel’.

Iran may now have enough processed uranium for six nuclear bombs, though we’ve heard similar for years: then again, previously Iran and Israel hadn’t already directly attacked each other, and Hamas, Hezbollah, and Syria were in-between the two. Another source says autumn 2025 is the Israeli deadline for a strike on those sites if no deal can be agreed. Israel also insists on the demilitarisation of southern Syria, protecting Druze there and, at a stretch, potentially opening a corridor to the Kurds in the north. That’s as rumors are the Kurdish PKK may end their 40-year civil war vs Turkey, opening new possibilities for a post-civil war Syria.

Trump played his cards close to his chest over Taiwan in response to being asked if he would defend it, distancing himself from President Biden in that regard. However, if one looks at US actions and statements from Secretary of State Rubio, US grand macro strategy is now about looking to China. Almost everything we are seeing around us is still a reflection of that, from Ukraine to NATO to reaching out to Russia, to the new Monroe Doctrine, to tariffs to DOGE. The US will not just be singing ‘YMCA’ soon, but ‘In the Navy’, and songs from ‘South Pacific.’

Indeed, there’s lots more love-and-death geopolitics today:

• Financial Times editor Martin Wolf says the US is now “the enemy of the West”, as Jeff Bezos says the Washington Post is now for “personal liberties” and “free markets”, which seems quite Western to some – though context obviously matters.
• US and Russian representatives are in Istanbul to talk Ukraine without Ukraine or Europe. Martin Wolf adds Europe must rise to the current occasion or “disintegrate” and “be picked apart by world powers.” Indeed, markets are getting ahead of themselves on the Eastern front, failing to account for the risk that we get a frozen conflict in which the EU and Russia rearm for round two, rather than Russia selling Europe cheap gas and all watching Dr. Zhivago together.
• UK PM Starmer visits President Trump hoping for US support on Ukraine – not the “Can we have a free-trade deal, please?” mission he was originally hoping for.
• VdL visits India looking to make large friends, fast. Recall the US is now backing the India-Middle East-Europe Corridor (IMEC), which works against China’s interests, and will offer huge gains to both ends, while requiring stability in the middle – including Iran, Syria, and Gaza.

Like I said, it’s all a lot to take in and too much one still has to leave out. But I leave you on the latter part of ‘Love and Death’:

BORIS: “How I got into this predicament I’ll never know. Absolutely incredible. To be executed for a crime I never committed. Of course, isn’t all mankind in the same boat? Isn’t all mankind ultimately executed for a crime it never committed? The difference is that all men go eventually, but I go six o’clock tomorrow morning. I was supposed to go at five o’clock, but I have a smart lawyer.”

The 401(k) millionaire club has surged in size, fueled by American exceptionalism and the meteoric rise of MAG7 stocks, which have skyrocketed over recent years amid the era of “The Next AI” theme.

Bloomberg cited new Fidelity Investments data showing that the number of 401(k) accounts with balances of $1 million or more jumped 27% to 537,000 in 2024.

The data showed that while 60% of Americans have access to 401(k)-type plans, most accounts hold less than $1 million—averaging around $131,000 at Fidelity—with steady contribution rates.

The growing size of the 401(k) millionaire club has been primarily because of the hockey-sticking Mag7 chart below—everyone loaded up on the same big tech stocks as US tech outshined China, Europe, and the rest of the world. 

However, newly minted 401(k) millionaires must remain vigilant of the “DeepSeek China moment“—a possible inflection point for the market that has shown US exceptionalism fading in recent weeks. 

There is so much grassroots excitement about AI, in iOS 18.3 Apple is forcefully including everyone into its AI product since nobody will do so on their own.

But yeah, $300BN in capex. pic.twitter.com/sjdDiXexMi

— zerohedge (@zerohedge) January 29, 2025

What could derail the MAG7 party and put those newly minted millionaires back into the poor house is if TD Cowen’s report on Microsoft data center order cancellations is accurate. MSFT fired back at Cowen, denouncing the claim… 

Microsoft “Strongly Refutes” Cowen Report It Is Canceling Data Center Orders… But Questions Linger https://t.co/2dBqZZ8TyQ

— zerohedge (@zerohedge) February 24, 2025

Even with the rising tide in equity markets, the inflation storm unleashed by the Biden-Harris administration has financially crushed low/mid-tier consumers, resulting in wealthy Americans trading down for Walmart in recent quarters. 

More from the Bloomberg report…

… something that has happened only 10 times since 1871 — survey after survey shows most Americans remain anxious about being able to afford a comfortable retirement.

“People have concerns about the economy, the rising cost of living, rising inflation — so the thinking is that they’re likely making some sort of change somewhere in their personal financial lives,” said Michael Shamrell, vice president of thought leadership at Fidelity. “But it looks like they’re not pulling back on their retirement savings.”

… 

For those behind on savings, members of Gen X have been making strides as they approach retirement age. About 14% made catch-up contributions and the cohort had a total savings rate of 15.2%, in line with what many financial advisers recommend. Additionally, those who have saved in 401(k)s for 15 years, with the same employer, saw average balances jump 18% to $589,400 last year.

Meanwhile, Gen Z savers, the oldest of whom are now 28, were no savings slouches, either. Members of that generation who have contributed to their 401(k) for five years saw average balances rise 66% to reach $52,900. Such a huge jump is likely due to having a high proportion of their savings in equities.

Overall, almost 40% of retirement savers bumped up their contribution rate last year, for an average increase of 2.9%. A chunk of that likely came from the use of auto-escalation plans, which automatically raise an employee’s contribution rate by 1% a year. About 90% of savers got a contribution from their employer, Fidelity said.

For those newly minted 401(k) millionaires, just hope the US exceptionalism theme does not continue fading…

… or otherwise, you’ll be back in the poor house.